Ring in the New Year with The Payroll Advisor

Each year payroll professionals attend year end webinars or live events to get the latest news on how to close out the old year and begin the new one.  This year I am offering something a little different than “year end”.   My next lecture will focus on just the new year.  So I am calling it “Ringing in the New Year–2020”.  In this 90-minute lecture I will cover all the latest for 2020.  This includes:

  • Completely new and revamped 2020 Form W-4
  • New DOL exempt rules
  • Minimum wage increases on the state level
  • New and upcoming sick leave and/or paid leave programs going into effect
  • 2020 Form W-2
  • 2020 Form 941
  • 2020 Form 1099-NEC

This different approach allows me to concentrate on the upcoming year and saves your time by not having to review information you may already know or will receive from other sources.

Our price for this information packed lecture is only $149. Click here to register.  Subscribers to Payroll 24/7 will receive a 20% discount if they register by Tuesday, December 3, 2019.  Not a subscriber to Payroll 24/7?  Try us out with your registration. If you register prior to Tuesday, December 3, 2019 you will receive a free 60-day subscription to this valuable payroll news service.

This lecture has been submitted to APA for 1.5 RCH credits.

DOL Proposing Rules for Tip Credit Provisions

The U.S. Department of Labor (DOL) has announced a proposed rule for tip provisions of the Fair Labor Standards Act (FLSA).  The proposed rule would implement provisions of the Conso

Still life of a full tip jar

lidated Appropriations Act of 2018 (CAA). The proposal would also codify existing Wage and Hour Division (WHD) guidance into a rule.

According to the announcement: The CAA prohibits employers from keeping employees’ tips.  During the development of those provisions, the Department provided technical assistance to Members of Congress. DOL’s proposed rule would allow employers who do not take a tip credit to establish a tip pool to be shared between workers who receive tips and are paid the full minimum wage and employees that do not traditionally receive tips, such as dishwashers and cooks.

The proposed rule would not impact regulations providing that employers who take a tip credit may only have a tip pool among traditionally tipped employees. An employer may take a tip credit toward its minimum wage obligation for tipped employees equal to the difference between the required cash wage (currently $2.13 per hour) and the federal minimum wage. Establishments utilizing a tip credit may only have a tip pool among traditionally tipped employees.

Additionally, the proposed rule reflects the Department’s guidance that an employer may take a tip credit for any amount of time an employee in a tipped occupation performs related non-tipped duties with tipped duties. For the employer to use the tip credit, the employee must perform non-tipped duties contemporaneous with, or within a reasonable time immediately before or after, performing the tipped duties. The proposed regulation also addresses which non-tipped duties are related to a tip-producing occupation.

In this notice of Proposed Rulemaking (NPRM), the Department Proposes to:

  • Explicitly prohibit employers, managers, and supervisors from keeping tips received by employees;
  • Remove regulatory language imposing restrictions on an employer’s use of tips when the employer does not take a tip credit. This would allow employers that do not take an FLSA tip credit to include a broader group of workers, such as cooks or dishwashers, in a mandatory tip pool.
  • Incorporate in the regulations, as provided under the CAA, new civil money penalties, currently not to exceed $1,100, that may be imposed when employers unlawfully keep tips.
  • Amend the regulations to reflect recent guidance explaining that an employer may take a tip credit for any amount of time that an employee in a tipped occupation performs related non-tipped duties contemporaneously with his or her tipped duties, or for a reasonable time immediately before or after performing the tipped duties.
  • Withdraw the Department’s NPRM, published on December 5, 2017, that proposed changes to tip regulations as that NPRM was superseded by the CAA.

After publication this NPRM will be available for review and public comment for 60 days. The Department encourages interested parties to submit comments on the proposed rule. The NPRM, along with the procedures for submitting comments, can be found at the WHD’s Proposed Rule website.

Opinion Letters Issued

Despite all the “turmoil” that is going on over at the U.S. Department of Labor (DOL), the work is still continuing. The DOL has issued three new opinion letters that address compliance issues related to the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA). An opinion letter is an official, written opinion by the Department’s Wage and Hour Division on how a particular law applies in specific circumstances presented by the individual or entity that requested the letter.

The latest opinion letters are:

  • FMLA2019-2-A: Addressing whether attending a Committee on Special Education meeting to discuss a child’s Individualized Education Program qualifies as FMLA leave;
  • FLSA2019-11: Addressing the application of the section 7(k) overtime exemption to public agency employees engaged in both fire protection and law enforcement activities; and
  • FLSA2019-12: Addressing the employment status of volunteer reserve deputies who perform paid extra duty work for third parties.

Be sure to keep up with the latest rule changes and opinion letters from the DOL with a subscription to Payroll 24/7.  Only $149 per year for all the latest payroll news right to your inbox.

Our First Payroll Lecture is Here

I am offering my first payroll lecture of the year next week on June 18th.  The subject will be travel pay. The lecture is two hours from 10:00 am to Noon Pacific time.  It is approved by the APA for 2 RCHs.  The nominal charge for the webinar is $99.  You can register under our Shop on our website. 

Learning Objectives:

  • Understand the FLSA requirements for paying an employee who travels
  • Comprehend the best practices for tracking and paying for travel pay
  • Understand the IRS requirements for taxing travel pay reimbursements including per diems and accountable plans.

EFT, ACH and EDI are Different and It Matters

In payroll we tend to use the terms EFT, ACH and EDI interchangeably.  But in actual practice they are quite different.  To help explain these important differences the National Automated Clearing House Association or NACHA has provided some guidance on their April 29, 2019 blog, written by Rober Unger.   It is helpful to payroll professionals to understand these terms and use them correctly.  I found this blog extremely helpful and I hope you do to.

The Social Security Wage Base Projections Are Here!

Every year we, in payroll, wait in anticipation for the social security (OASDI) wage base to be announced. This basically heralds in the year end/year beginning processing time.  But for some, maybe those responsible for employment tax budgets or financial reports, the wage bases for future years is a handy thing to have all at once and not just wait for it at the end of the year. For this reason, the Social Security Administration (SSA) publishes their estimates for the social security wage base each year.  The years 2020-2028 are included in this year’s 2019 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds.   The SSA provides three estimates, high, intermediate and low. For example, for 2019, the actual wage base is $132,900. However, the 2018 report projected $132,300 to $136,800.  The following chart lists the projections estimated by SSA (on page 115 of the report) for calendar years 2020 through 2028:

We still have to wait until October or so for the actual 2020 wage base, but the estimates can be useful in predicting future labor costs.

 

Reminder: Keep up with the payroll news by subscribing to Vicki’s e-news alerts, Payroll 24/7.  The latest payroll news when you need it, right to your inbox.

A Fresh Approach to Payroll Training is Coming Your Way!

I am proud to announce that I am once again offering training webinars but this time with a fresh approach.  We are an approved provider by the American Payroll Association (APA).  This means that my training can earn you RCHs as well as enhance your education.  But my training will be different than the usual fare that you get for webinars, even the ones I conduct for other vendors.  Instead of just listening, my webinars or “lectures” as I call them, will be interactive. Let me explain how this works.  I am an adjunct faculty member at Brandman University and am responsible for their Practical Payroll Online program. I do all of the materials for the program as well as teach the courses.  Each year I record various topical lectures for my students to use in each of the five courses.  These “lectures” are provided live to the students at a certain date and time and are recorded using the Zoom software Brandman provides. Students may attend the live event or may choose to view the recorded version, it is up to them. Because these are related to the course work, they include more interaction than standard or traditional webinars. For example, you can ask questions at any time during the lecture just as you would in a live classroom setting. You may have forms to complete (such as the lecture on the Form 941 or Form W-2) or you may have calculations to perform for the child support lecture. Each lecture is a full two hours, so more time to devote to the information and to related questions.

Students enrolled in the Brandman program are permitted to attend the lectures for free and do not receive RCHs.  However, I have had numerous requests to provide payroll training that gives RCHs so this is how I have decided to offer that training to my non-students.  I will post the latest lecture on my website.  All lectures are during normal business hours and usually held on Tuesday, Wednesday or Thursday.  I cannot offer these lectures for free.  There is a fee for APA certification, but I want to keep the costs within everyone’s budgets.  The introductory cost will be $99 per lecture per attendee.  That is two RCHs for less than $100 and no sales pitches or follow-ups about buying anything.  You may sign up with a personal email or with your business email, whichever you prefer.  And you don’t need to worry about getting your questions answered.  Since this is still a “class-room” style setting I am limited to only 20 additional attendees per lecture. So you won’t be lost in the multitude of other attendees vying for attention.

I will be offering our first lectures in May on Travel Pay, Child Support, Multistate Taxation, and Wage and Hour Law.  June’s lectures will include California Wage and Hour Law, Tax Levies and Creditor Garnishments, Payroll Procedures, and Abandoned Wages.  As each lecture is approved by the APA it will be posted to our website and open for registration. You simply pay online for the lecture and you will receive all the info for how to log into the classroom on the day of the lecture within two business days of registering.  After the lecture, your Certificate of Attendance will be issued once we verify you have completed all the required time in the classroom, the required APA polls, and the survey,  usually within 2 weeks after the lecture.

Unfortunately, although the lectures are recorded for use on the Brandman website, I cannot offer the lecture as an on-demand product or after the fact electronic version.  Only live attendees will be accepted. But you always have the option of signing up for the Brandman course which features the lecture and if you complete the tests and quizzes can receive up to 8 RCHs for $200 per course for APA members. One more way to earn RCHs at a low price.

We are very excited to be offering this learning opportunity to our social media network.  We hope you find our lectures informative and useful. Further announcements for exact dates and topics will be coming.

New DOL Wage and Hour Opinion Letters Have Been Delivered. Let’s Look Inside…

The U.S. Department of Labor (DOL) announced on March 14th, that they had released new opinion letters on their website.  These letters address the compliance issues related to the Family and Medical Leave Act (FMLA) and the Fair Labor Standards Act (FLSA).  Before we review the new opinion letters for the FLSA, let’s do a quick review of what exactly is an opinion letter.

The Wage and Hour Division issues guidance primarily through Opinion Letters, Ruling Letters, Administrator Interpretations, and Field Assistance Bulletins. They are provided on the DOL website.

An interpretation or ruling issued by the Administrator interpreting the Fair Labor Standards Act (FLSA), the Davis-Bacon Act (DBA), or the Walsh-Healey Public Contracts Act (PCA) is an official ruling or interpretation of the Wage and Hour Division for purposes of the Portal-to-Portal Act. 29 U.S.C. § 259. Such rulings provide a potential good faith reliance defense for actions that may otherwise constitute violations of the FLSA, DBA, or PCA. Prior rulings and interpretations are affected by changes to the applicable statute or regulation so an employer should always periodically review any relevant opinion letters that it uses as a basis for a policy to ensure that changes have not occurred. From time to time the DOL updates its interpretations in response to new information, such as court decisions, and may withdraw a ruling or interpretation in whole or in part.

Now on to the new letters just recently issued.

FLSA2019-1:  This opinion letter clarifies the FLSA wage and recordkeeping requirements for residential janitors and the “good faith” defense. Discusses what to do if the FLSA and state requirements do not match. In this case the state of New York did not consider the employee subject to minimum wage and overtime but the FLSA does.

FLSA2019-2: Addresses the FLSA compliance related to the compensability of time spent participating in an employer-sponsored community service program.

I always encourage employers to use the opinion letters when formulating policy.  If you don’t see an opinion letter that addresses your issue, you may ask for one to be issued on that policy or question by submitting the request online.  Of course, not all requests submitted result in an opinion letter being issued. Or it may be issued but as a non-administrative letter which holds less weight. But it doesn’t hurt to ask!

Reminder: Keep up with the payroll news by subscribing to Vicki’s e-news alerts, Payroll 24/7.  The latest payroll news when you need it, right to your inbox.

Taxpayer Advocate Annual Report: Payroll is Upfront and Center in this Year’s Recommendations

The Taxpayer Advocate Service is an independent organization within the IRS.  Its purpose is to ensure that every taxpayer is treated fairly and to help taxpayers know and understand their rights.  The current Taxpayer Advocate is Nina Olson.  Each year the National Taxpayer Advocate (NTA) releases their Annual Report to Congress.  This report describes the challenges the IRS is facing. Federal law requires that the NTA’s annual report identify at least 20 of the most serious problems encountered by taxpayers and to make administrative and legislative recommendations to mitigate those problems. The following are the highlights of this year’s recommendations that affect payroll:

  1. Alternative to Form W-4: The report recommends scraping the Form W-4 altogether and analyzing the feasibility of adopting an IRS-determined withholding code. This approach is currently being utilized in the U.S. tax administration.  It also recommends that withholding be expanded at the source to encompass not only wages, but taxable interest, pensions, dividends, capital gains, IRS income, unemployment and even, potentially, certain earnings as an independent contractor.
  2. Furnishing Information Returns Electronically: Information return data to taxpayers should be furnished electronically for direct importation into tax return preparation software or to authorized tax return preparers.
  3. Lower Electronic Filing Thresholds: The report recommends requiring employers with more than five employees to file Forms W-2 electronically.
  4. Form 941 Filing: Recommends requiring Form 941 contain information about each employee’s name, address and social security number. To promote electronic filing, direct the IRS to use the fillable form currently on the IRS website and reformat so the form can be electronically filed, at no cost, directly from the website.
  5. Effects of the new tax law and the shutdown on overall IRS workloads: With all of the new tax forms needed to incorporate the changes to the tax code the IRS was overwhelmed. Add to this the shutdown and the antiquated systems (IRS has two of the oldest IT systems in the federal government) and you have a recipe for potential disaster. Because of these issues the IRS is now having to process more than five million pieces of mail and over 87,000 amended returns. All manually. IT modernization was the number one recommendation in this report.

Whether or not the recommendations are implemented is anybody’s guess.  But as the situation is becoming more intense at the IRS for meeting deadlines and handling the workload with antiquated systems it will be well remembered to monitor this report for any upcoming legislative changes.  Especially in the area of electronic filing, lowering thresholds and replacing the Form W-4.

Reminder: Keep up with the payroll news by subscribing to Vicki’s e-news alerts, Payroll 24/7.  The latest payroll news when you need it, right to your inbox.

Election Day a National Holiday?

Well it’s almost over, the 2018 election. Still having a few counts here and there with a runoff election still to come. But all in all, the 2018 election has come and gone. The only thing that remains, as it does after every election cycle here in the United States, is the discussion of making election day a national holiday. But what exactly does a “national holiday” mean here in the United States?

It appears to me that most people who discuss having election day designated as a national holiday don’t understand how holidays work here in this country. The United States does not have national holidays. It’s that simple. Yes, we have days that are designated as a holiday on the federal level. But these days are not official holidays for all employees in the country. They are, rather, the days that federal employees are given off with pay. I have stated this before, in other blogs, but will state once again. The United States is the only country that does not mandate that employees receive days off with pay in honor of national holidays. When I say other countries, I am speaking of course of industrialized countries. But this list of industrialized countries includes Chad, Peru, Slovenia and Sudan. So, we are not only talking about major European countries such as Germany or France. But if we were just looking at European countries let’s take Germany as an example. Germany has one national public holiday which is their German Unity Day, with the remaining 9 to 13 holidays being regulated by what they call their states even though some of them are held nationwide. Now this is in addition to 20 days of vacation as well as additional dates that the employer may give as a public holiday. Yet despite this they have a very strong economy. Yet here in the United States is not mandated for all employees to have the nation’s birthday, July 4th, off with pay.

Therefore, when local, regional, statewide, and national elected officials talk of having our election day as a national holiday it means nothing to the average worker if it were simply to be added to the holidays we already have. Yes, many employees may get Christmas off with pay, or Fourth of July off with pay, but not all employees are required to be given the day off with pay. It all depends on the company’s or employer’s policy. According to the Bureau of Labor Statistics workers in private industry in the United States receive an average of eight paid holidays per year based on the latest statistics in 2017. Workers in the manufacturing and information industries are more likely to receive paid holidays (97%). But workers in the leisure or hospitality industry only receive paid holidays 37% of the time. Not all workers receive the same holidays or the same number of holidays. For example, again the Bureau of Labor Statistics states that workers in manufacturing and financial activities receive an average of nine paid holidays per year while workers in leisure and hospitality receive an average of six paid holidays per year. For clarification, there are 10 annual federal holidays with Inauguration Day occurring only once every four years for a total of 11 days.

Before you start the discussion of employees who would not be able to have a day off due to their type of work such as first responders, hospitals and even restaurants, other countries have already addressed this issue quite easily.  It is usual for the employee who must work on a “mandated holiday” to have another day off with pay. So, if on a Monday holiday, I would have to work as a police officer, I might get Tuesday or Wednesday off with pay in addition to my normal days off.

My question to all the elected officials and others who advocate a national day off to vote is this:  Where would this national election day fall? Would it establish our first and only mandated national holiday? Or would it just simply be added to the calendar as another day to shop, BBQ or sleep in, if and only if, my employer decided to give me the day off with pay?